For the second time in as many months, embattled IT services giant Electronic Data Systems is fighting for its Australian public sector life as government agencies activate sunset clauses on the last of its big-bang outsourcing deals.
The Australian Customs Service has given the services vendor notice of a full-scale strategic review of all IT operations in preparation for the conclusion of its current deal with vendor, due to expire in June 2007.
The Customs review comes only weeks after Australian Taxation Office said it would substantively modify all IT vendors' contracts, including EDS's, if they wanted to keep their business.
Customs CIO Murray Harrison told Computerworld the strategic review had become necessary because the agency had changed both its business process and core technologies over the life span of the current EDS contract, which commenced in 1996.
Naming Customs' Cargo Management Re-engineering project as an example of significant change, Harrison says a request for proposal for IT solutions will be put to the market by the end of 2005 or early 2006.
"We are going to do a fairly detailed examination of what we've got and how it [Customs' current IT infrastructure and processes] relates to each other. We've set up a new branch — the national strategic planning and sourcing branch," Harrison said.
The new branch has been charged with developing future blueprint for how Customs will both run and procure IT. Harrison's lead is being carefully watched by CIOs of other government agencies — not least because Harrison chairs the procurement arm of the federal government's influential Chief Information Officer Committee (CIOC).
While Harrison would not discuss how any future IT budgets might look, EDS' current reign over infrastructure and 5,000 desktops costs Customs around A$80 million a year — exclusive of the agency's A$183 million Cargo Management Reengineering project.
EDS was contracted to build CMR in 1996, however the project stalled and was re-tendered to a consortium headed by Computer Associates and IBM in 2001. The first stage of CMR, exports, went live in October and is understood to be performing at or above expectations.
While not naming EDS, Harrison says aspects of the project "could have been handled better", adding CMR had was representative of the next wave of strategic IT at Customs as the agency moved off older transactional systems and onto web-based platforms.
"Obviously we have been focused on CMR for some time ... and we have to broaden our horizons a bit now. The causing issue is that once the contract of five years [plus four years of extensions] finishes, there is no other option than to go back to the market," Harrison says.
EDS was approached for comment in this story but did not provide any.